Microeconomics Chapter 2

Production Possibility Frontier

a graph that shows the combinations of two goods the economy can possibly produce given the available resources and the available technology.

Exports

Goods produced domestically and sold abroad.

To Exports means to sell domestically produced good abroad

Imports

Goods produced abroad and sold domestically

To import means to purchase goods produced in other countries

Absolute Advantage

the ability to produce a good using fewer inputs than another producer

Comparative Advantage

the ability to produce a good at a lower opportunity cost than another producers